From Steam to Silicon: Patterns of Technological Revolutions

Summary

From agriculture to AI, each major economic revolution is driven by a new kind of value conversion: a way of transforming one type of value into another. These revolutions are not defined by a single invention, but by a sequence of innovations: a core conversion, the infrastructure to scale and distribute various innovations, and the technologies that reduce the cost of distance and delays. We shall analyse six major revolutions through this lens and show how each laid the groundwork for the next. Technological revolutions There are seven key components to each technological revolution: Core conversion: a new capability that transforms one form of value into another. Value can be either tangible (e.g. natural resources and goods) or intangible (e.g. trust, information, and actions). Scaling infrastructure: physical systems that make the conversion repeatable and cost-efficient at scale. Spatiotemporal compression: tools that shrink the cost of distance or time in the economy by i) increasing connectivity, ii) reducing the latency of interactions, or iii) expanding the scale or speed of economic coordination. Key resources: physical or non-physical ingredients that are needed in the core conversion recipe. Economic mode: each technological revolution has its own dominant way of creating and capturing value. Centralization/decentralization arc: core conversions start centralised to exploit economies of scale, but as complementary technologies lower transaction costs, production disperses. Administrative innovations: standards and bureaucratic tools to support the technological revolution at scale and across geographical areas, which may or may not be from the era itself. Each technological revolution is also a bridge to the next revolution, in that its innovations enable the next one to thrive. Timeline In the table below, I have summarized the pattern for the agricultural, financial, and four industrial revolutions: The ((core conversion)) is made efficient thanks to...